SECTION 2 Understanding the Variables
In the course of a County career, there are many factors and events that can impact an individual’s retirement benefits. These include circumstances such as leaving and returning to service, prior or future employment with a reciprocal retirement system, transferring retirement plans, prior or future service as a safety member, and prior County and/or other government service, among others.
Let’s explore how these factors can affect Plan A and B benefits.
The Importance of Service Credit
Plan A and B members earn retirement service credit for each payroll period of County employment during which a retirement contribution is made. Since years of service credit is one of the factors that determines the monthly allowance you receive when you retire; the more years of service credit you have, the higher your monthly retirement allowance will be.
Service credit also affects the cost of your LACERA-administered retiree health care benefits. The County subsidizes retiree medical/dental insurance based on a member's years of service credit; the more County service credit you have, the more the County pays toward your premiums.*
*Certain exceptions apply.
Purchasing Service Credit
Service credit may be purchased for certain types of County and non-County government service performed prior to the date you became eligible for LACERA membership (various eligibility requirements apply).
Previous County service may include:
- Temporary County service
- Permanent County Time prior to LACERA membership
- Redeposit of Withdrawn Contributions
- Sick Without Pay (SWOP)
- Conversion of prior general service to safety service
Other government service may include employment with:
- U.S. military
- U.S. government (federal)
- State of California
- Other public agency within California
Purchased police or fire academy time and/or U.S. military service will be converted to safety service credit. All other purchased previous service will count as general service credit. In such cases, the member will assume dual membership status.
Purchasing non-County service will increase your total years of service credit, but will not count toward meeting the minimum service credit requirement to retire or to qualify for a nonservice-connected disability retirement, pre-retirement survivor benefits, or to defer your retirement.
For details on purchasable service, eligibility, contract terms, and calculation methods, visit the Benefits/Active Member section of lacera.com.
Additional Retirement Credit
Additional Retirement Credit (ARC) provides a way to increase your years of service credit. It is not based on actual employment. The ARC you purchase will increase the total amount of your service credit, which in turn, will increase the amount of the monthly retirement allowance you will be entitled to receive when you retire. Any ARC you purchase is eligible for COLA adjustments, as well.
If you are an active member with at least five years of actual County service credit, you are eligible to purchase ARC.*
Certain restrictions apply. ARC is applied to your total service credit solely for the purpose of calculating your retirement. It does not apply toward:
- Meeting minimum eligibility requirements for a service or disability retirement, vesting, or retiree health care subsidy
- Cancellation of contributions for members who attain 30 years of service credit
- Calculating additional LACERA-administered retiree health care benefits, or other benefits based on total years of service credit
The minimum purchase is one year of ARC; the maximum purchase is a total of five years under any plan or combination of plans.** You may choose the length (payment period) of your ARC contract; contracts range from one month to a maximum of ten years (120 months).
*Reciprocal service and purchased temporary time do not count toward eligibility to purchase ARC.
**Additional months may be purchased once the purchase of one or more full years has been completed.
6/16/09